Cost Advantage Of Zara

Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and founded in 1975 by Amancio Orteg. It is the flagship chain store of the Inditex group, the world's largest apparel retailer. Zara describes its business as “The fast fashion” model which abandoned the traditional model of seasonal lines using instead adapting the creative ideas to customer demand on a going basis. Fashion clothes are like food, it turns bad quick. Zara’s business is about reducing response time. Zara needs about two week to develop a new product and gets it to stores. The company launches around 12,000 new designs each year. Zara’s success offers us some instructive lessons in how to create and sustain a break through strategy.

Zara’s value chain differs from the other traditional models a lot. The design and creation rely extensively on copying fashion trends observed at the fashion shoes and at competitors’ points of sale, which based on buyers and designers alike.

What makes the middle aged mother to buy cloths in Zara while the daughter aged in mid 20s buys Zara clothing? Because it is fashion able and up to trend. By collecting data and focusing on shorter response times, the company ensures that its stores are able to carry clothes that the consumers want at that time. Zara can move from identifying a trend to having clothes in its stores within 30 days. That means Zara can quickly and catch a winning fashion trend, while its competitors are struggling to catch up. Catching fashion while its hot is a clear recipe for better margins with more sales happening at full prices and fewer discounts. In comparison, most retailers of comparable size

Zara is established in 1975, as the flagship brand of Inditex group, which founded by Amancio Ortega. In a short period, Inditex group has become one of the world’s top fashion retailers with more than 4000 stores across 82 countries around the world and more than 50% is accounted as Zara’s. Another Inditex brands which operate worldwide are Massimo Dutti, Oysho, Stradivarius, Zara Home, Pull and Bear, and Uterque. By seeing the Inditex’s brands list, it can be concluded that Inditex almost covers all aspect in fashion industry (Zara 2008).

The basic strategy for fighting competition is to attract buyers at lower prices, more unique designs, high-quality design, efficient customer service and solid image brand. Thus bargaining power of buyer for apparel industry is high as the products falls under the basic needs in human lives. There is no much difference in terms of products offered by the apparel company, so if buyer is unhappy with the product or service they can easily switch to another brand. Thus, Zara are trying to strengthen its position in the market by using their unique strategy by giving priority to buyer to meet their special needs.

In society is such opinion about prices, if the product price is low, it means that the quality is low. People think that everything with high prices has high quality, but it is not true. In this case Zara did not want to be seen as a low quality brand. Hence they create products of high quality. They wanted to be first between fashion brands and add new designs to their collections twice a week. For customers is not good to look the same designs two week, the company knows about customers needs and they remove the products that do not sell well and changes the stores’ organization twice a week. Products can be different by their functional aspects, by the price and the quality. Zara differentiates by these elements. The main point of the differentiation strategy for Zara is combination of the low price and high quality and if other companies want to be desirable, they must do the same. Zara tries to decrease the product in the inventory and increase the number of variable

Zara is a modern day fashion business that takes an unconventional approach in their business model. Zara is one of the largest international fashion companies which belongs to the distribution group called inditex. They sell well made relatively cheap pieces of clothing that is always cut according to the latest fashion designed. Their customers are the heart of their designs, productions, distribution and sales. Just like all fashion companies, their primary goal is to be the number one fashion retailer. To obtain that success, their new business model challenges the industry and pushes them ahead of their competitors. Zara unique approach to fast fashion pays off as many other brands are trying to follow their success. What sets Zara apart from other modern businesses is that, their business model is to react to fashion trends as quickly as possible. Zara adapt quickly to current trends and fashion that the public demand. Their goal is create fresh new trendy design almost every one to two weeks that will be ready to be produced and shipped. Their primary goal in creating these new sketches is not only to identify trends but to evolve and never repeat their designs. Zara’s company’s strategy involves stocking their inventory very little and updating their collection often. This benefits them because it makes the shopper feel like they have to buy the item, or else it would be sold out later on. Zara’s risk taking strategy has proven to work because according to

In conclusion, Zara’s Marketing strategy is genius. They know how to make their products attain the consumers' want, further than what they need, and create tremendous value for them. Often, Zara offers sales-off programs that reward customer loyalty as in bonding relationship with them. Zara also treasures the value of its proposition: they keep their promises by always supplying the fashionable clothes with affordable price. As the point of marketing, creating the value for customers and gaining that value from those. Zara has successfully achieved it, which is something really hard to do. Their brilliant marketing strategy has brought Zara to success, now they owns over 2,100 stores across 88 countries, and globally

This report is mainly focusing on studies of marketing strategy. By analyzing and discussing the case of Zara, we will be able to have a more in depth analysis of companies and their marketing strategies.

Product in the marketing mix of Zara. Zara is known as the coca cola of fashion. Such as craze of this brand among the fashion enthusiasts one of the major strength of the company is that it is able to respond very quickly to the changing needs of the customers. Pricing in the marketing mix of Zara the concept of Zara is to provide its products at a reasonable price to its customers. It follows the customers find its prices quiet affordable. However, we have to know that we are referring to the cream customers who would compare Zara with Hugo boss or others. Zara has premium pricing strategy. The pricing made optimizing development and training costs. Promotions of marketing mix in Zara .it is a unique marketing policy of "zero investment in marketing". Instead, the company uses money it would have used to advertise in opening new stores. The striking thing about Zara Is that it has found differences that matter to the consumers and used that to differentiate itself from the rest of the competition. In the place in marketing mix of Zara. Is very unique and one of the things that make

Zara brand products are part of the Inditex Group which was founded by Amancio Ortega. Zara brand products currently compete in what is called the fast fashion industry. Fast fashion is a trend in the fashion industry where companies produce and sell new clothing trends within the market as quickly and cheaply as possible (Fernando, 2015). This is made possible by new innovations within the supply chain management of these companies. Innovations are precisely the way Zara has become one of the top fast fashion businesses in the industry. By utilizing their core competencies along with efficiently managing their supply chain, Zara has developed a way to give customers what they want faster than anyone else (Hitt, Ireland, & Hoskisson, 2017, p. 100). Zara has done an excellent job at defining its business strategy and utilizing their core competencies to create value for their customers which is why they keep coming back. This also brings in new customers to purchase from Zara. The purpose of this paper is to examine Zara and various aspects of their business.

Zara is known for one of the smartest company to sustain a breakthrough marketing strategies and efforts. They have been successful in the fashion industry for over many years and now a day, still continue to earn more accomplishment to become the “Spanish successful story”.

Vertical integration, a distinctive feature of Zara’s business model, has allowed the company to successfully develop a strong merchandising strategy. This strategy has led Zara to create a climate of scarcity and opportunity as well as a fast-fashion system. However, Zara’s strategy creates some weaknesses. Their vertical integration has more advantages than drawbacks but it is important to recognize its limitations. Vertical integration often leads to the inability to acquire economies of scale, which means Zara cannot gain the advantages of producing large quantities of goods for a discounted rate. Higher costs are then incurred for the Inditex

Next, the essay will concern about five performance objectives that help Zara achieve competitive advantage in business. About quality, beauty, affordable prices and fashion are factors leading to magic success of Zara as well as other brands of Inditex, but it is not easy to do that. Amancio Ortega is president of the corporation with 32,000 employees, but he still has habit of operating as a family company with a clever and simple style. Zara operates with closed model from research, design, production, distribution and retail. Diversity, abundance and frequent changes of clothing design have become the biggest competitive advantage of Zara. The competitors expect to have the attraction like Zara. Most customers feel loss or lack

In recent months, Zara has observed the demand for a second retail shop in Bulgaria, located in Plovdiv. Therefore, the business aspect for this project is the growing and developing of the trademark Zara. The fact that Zara already has its first shop in Bulgaria (Sofia) and the profits are really higher, leads to the assumption that the project for opening a second shop will gain even higher results in the future. What is more, there is an analysis that shows the more and more increasing demand for Zara’s products. Thus, the project for a new shop in Plovdiv will assure people’s needs and wants.